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Why we need to rethink 21st century economics and move towards a circular economy
By Hollie Ryan
Our current linear economy is focused on a take, make, use, and dispose model - and this is a big problem for the Earth’s limited resources.
Today we extract and use around 50% more natural resources than only 30 years ago, which is around 60 billion tonnes of raw material a year. With the global population predicted to reach 8.5 billion by 2030, a growing demand will continue to put pressure on Earth's limited resources. We cannot carry on this way.
An alternative model is the circular economy, one which aims is to keep resources in use for as long as possible by reusing, refurbishing, recycling and repairing, taking the maximum value from them whilst in use. This means that instead of disposing of finite resources, they will be kept within a cycle, preventing the further overuse of resources. This is vital for ensuring we stay within the limits of what the Earth is capable of sustaining in terms of human activity and use.
The Planetary Boundaries created by Johan Rockstrom is the idea that Earth has nine boundaries, crossing which could cause irreversible changes. We have already crossed the boundaries of climate change, loss of biosphere integrity, land-system change and altered biogeochemical cycles, which shows the pressing need to change the way we use the Earth's resources within the economic system.
Kate Raworth builds upon the Planetary Boundary model to create a one that focuses on a circular economy - she calls this Doughnut Economics. Twentieth-century economics has been focused on the idea of the discipline as a science - the idea of rational individuals - and so the human side has been lost. The focus has been on endless economic growth. Raworth believes that in the twenty-first century we need to focus on balancing our economy, meeting the needs of all within the means of the planet - thriving rather than growing.
Within Raworth's model, the inner ring of the doughnut represents the sufficient social foundation, which provides humans with basic needs and human rights such as food, sanitation, shelter, healthcare and education. The hole in the middle represents a state of deprivation, while the outer ring represents Rockstrom's planetary boundaries; the doughnut itself, in between, is the safe and socially just space for humans to live in.
We need an economic model that focuses on staying within these limits, ensuring we use the planet’s resources sustainably but also equitably. The model Haworth provides makes it really clear that our current economy is a big problem if we are overusing critical resources, while there are a huge amount of people without basic needs being met.
Raworth believes that in order to change the way our economy works, we should not attack the current system. Rather, we should focus on creating a new one - the circular economy - which will eventually replace the current linear economy, and is already springing up within many businesses models and governments across the world.